WASHINGTON — A group of bank trade associations told the Federal Deposit Insurance Corp. that the agency's proposed compromise on its updated supervisory appeals process
The FDIC earlier this year under acting Chairman Martin Gruenberg disbanded an internal court for banks to challenge supervisory findings, and instead reinstated a board-controlled committee. The board-controlled committee, or the Supervision Appeals Review Committee, is less transparent than the industry would like, and more important, would still ultimately answer to the FDIC's board.
Recently, the FDIC board voted on proposed amendments to the appeals guidelines that would expand and clarify the role of the agency's ombudsman, adding that person to the Supervision Appeals Review Committee as a nonvoting member who would monitor the supervision process after a bank submits an appeal.
That hasn't been enough to appease banks, who still prefer the old model. In a letter to the FDIC, the Bank Policy Institute, American Association of Bank Directors, American Bankers Association, Consumer Bankers Association, Independent Community Bankers of America and Mid-Size Bank Coalition of America made a number of suggestions that they say would improve the independence of the process.
"While we appreciate the agency's stated objective to enhance due process — and support certain aspects of the proposal such as a new requirement to share SARC information with both parties as a necessary safeguard to protect against one-sided information sharing — on the whole, the FDIC's most recent proposal sets forth only a patchwork of changes that do not fundamentally alter the shortcomings of the appeals process," the groups wrote.
Among the recommendations, the bank groups suggest that the FDIC set minimum qualifications for voting members of the reinstated committee and allow banks to bring appeals directly to the committee. The lobbyists also support prohibiting ex parte communications during an appeal and requiring those that inadvertently occur to be documented and shared with both the SARC and the appealing bank.
